The European Super League (ESL) could cost clubs €2.5 billion in brand value, according to a study.
The company has been tracking the financial value of football brands for 15 years, with the announcement of the ESL being the biggest shakeup to the game in that time, according to the study, which calculates that the ESL founding clubs are likely to lose a combined value of €2.5 billion, which could potentially rise to €4.3 billion.
“For the ESL ‘Founding Clubs’ the prize seems obvious - more money - but this ignores the huge risk that fans won’t follow and neither will the money," started Richard Haigh, managing director.
"There is outrage in the home markets from both fans and leagues alike, but it is not clear yet what the repercussions will be. Will fans vote with their feet and leave the clubs many have supported their entire lives? Will the leagues impose fines, or point deductions leading to relegation and further financial loss?”
The most likely scenario, the study claimed, is that the annual loss of the founding clubs will sit at €1.1 billion in revenue per year, with the brands suffering significant reputational damage, leading to a fall in brand value of €2.5 billion. The loss is made up of lower broadcasting, commercial and match day revenue, under the assumption that UEFA will not allow teams to compete in their Champions League tournament and the national leagues remove the teams from their rosters.
Analysis from the research indicates that not only would the move impact the finances of the founding clubs but on the other clubs in their leagues, which could lose up to 25 per cent of their value.
Hugo Hensley, head of sports services said: "In our view, the result will be damaging for the clubs involved. The sentiment of fans online is overwhelmingly negative, with negative posts outweighing positive ones 3 to 1. Negative sentiment like this will inevitably lead to lower matchday spend and commercial revenue in the clubs’ home nations, which is still the lion’s share of any European club’s income.”
Clubs would have to rely on a growth in revenue from the US and China but an uplift in either of these areas seems unlikely, with both countries preferring the domestic leagues, as found in Brand Finance's Football Fan Survey. 31 per cent of US fans prefer Major League Soccer (MLS) and 21 per cent of Chinese fans prefer the Chinese Super League (CSL).
Author: Jake Wilkin